Umicore FY 2019 performance 7 February 2020
Overview Highlights 2019 2020 outlook 2019 business review 2019 financial review Wrap up Q&A Umicore 2019 performance 2
Highlights 2019 Strong performance in challenging environment ENERGY & SURFACE RECYCLING CATALYSIS TECHNOLOGIES Favorable supply environment Growth in cathode materials for Market share gains in gasoline EVs in line with the market catalyst applications Optimized input mix offset Higher cathode materials sales Leading light-duty catalyst largely lower volumes in H2, sequentially and YoY provider in China, largest car market worldwide Higher metal prices Cobalt price halved vs 2018 Strong growth from fuel cell Higher D&A and upfront catalyst applications greenfield investment costs Significant strides made in the execution of our growth strategy 3 Umicore 2019 performance
2020 outlook Umicore expects to grow revenues and earnings in 2020* ENERGY & SURFACE RECYCLING CATALYSIS TECHNOLOGIES Increased availability of Hoboken No signs of imminent recovery in EV demand in China not expected smelter automotive market to materially recover in 2020 Sustained favorable supply Higher sales of cathode materials Benefiting from strong market environment for EVs and positive impact from position in gasoline catalyst recent acquisition in Kokkola Tailwinds from metal prices (partly applications and higher hedged in 2019) penetration of cGPFs in Europe Higher R&D, D&A and start-up and China costs Fuel cell catalyst production ramp- up in Korea *Assuming that the recent coronavirus outbreak will not result in a protracted or material effect on the economy in 2020 4 Umicore 2019 performance
2019 business review
Catalysis 2019 market context More stringent emission norms Recession in global car market in key regions Global light-duty vehicle production down by Euro 6d TEMP for all new vehicles since 6.3% year on year: September 2019 China - 8.9% Europe - 5.0% Early implementation of China 6a in July 2019 North America - 4.4% in several major cities and provinces China down 2 nd year in a row; steep contraction Increasing share of gasoline particulate filters in H1 19, while pace of decline eased in Europe and China somewhat in H2 19 Falling diesel production in Europe (-12%), share of 35% in European car market Umicore 2019 performance 6
Catalysis 2019 performance Revenues +7% and REBIT +10%; outperforming market reflecting market share gains in light-duty gasoline REVENUES 1.460 1500 1.253 1.360 1.163 1.094 Automotive Catalysts 743 652 1000 620 565 545 Market share gains in light-duty gasoline 500 709 717 Growing penetration of cGPFs in China and Europe 633 598 549 0 Leadership position in light-duty vehicles in China H1 2015 2016 2017 2018 2019 Higher volumes and revenues in heavy-duty diesel H2 REBIT Precious Metals Chemistry 300 13,2% 250 Strong demand from pharmaceutical and chemical 12,7% 12,3% 12,4% 10,6% industries 200 185 166 168 152 Significant increase in demand for fuel cell catalysts 124 150 99 82 85 75 100 63 50 86 87 81 78 61 0 2015 2016 2017 2018 2019 million € Umicore 2019 performance 7
Catalysis – major milestones in 2019 Capacity expansions Sustained investments Opening of new plant to support growth of in product and for fuel cell catalysts Automotive Catalysts in process innovation in Korea China, Poland and India Umicore 2019 performance 8
E&ST 2019 market context Slowdown in global EV demand and low cobalt price Global EV market up 7.7% in 2019 compared to 62% in 2018, reflecting abrupt decline in EV sales in China in H2 due to subsidy cuts LCO in consumer electronics: supply chain reducing excess inventories ESS in Korea: subdued demand due to safety incidents Depressed cobalt price (-56% vs 2018) and inflow of cheaper unethically sourced artisanal cobalt Umicore 2019 performance 9
E&ST 2019 performance Revenues -5%; REBIT -29% reflecting slowdown in demand and low cobalt price REVENUES 1500 Rechargeable Battery Materials 1.289 1.225 Lower sales for portable electronics and ESS 894 1000 639 618 Higher sales for EVs, in line with global EV market 610 587 495 Recycling and refining activities hit by low cobalt price 500 322 289 650 607 Higher D&A, higher R&D and upfront costs for 398 298 288 greenfield expansions 0 H1 2015 2016 2017 2018 2019 H2 REBIT Cobalt & Specialty Materials 19,8% Impacted by low cobalt price and inflow of cheaper 500 14,6% 14,5% unethically sourced artisanal cobalt 400 13,2% 12,6% Customers reducing excess inventories 300 257 183 200 136 140 Revenues for Electroplating slightly up; stable 81 82 100 70 79 45 121 30 102 revenues for Electro-Optic Materials 61 40 37 0 2015 2016 2017 2018 2019 million € Umicore 2019 performance 10
E&ST – major milestones in 2019 Capacity expansions Commissioning of Acquisition of cobalt refinery • Commissioning greenfield new Process and cathode precursor plant in China Competence Center activities in Kokkola, Finland • Start of construction greenfield (Olen, Belgium) plant in Poland Support for long-term Multi-year cathode growth Conclusion of long-term materials supply • Obtained support within supply partnerships for agreements with leading EV framework of IPCEI* for sustainable cobalt battery makers, LG Chem batteries and Samsung SDI • Global Battery Alliance initiative * Important Projects of Common European Interest Umicore 2019 performance 11 11
Recycling 2019 market context Supportive metal prices and favorable supply environment Supportive metal price environment Higher prices for certain precious and platinum group metals, particularly in the second half of 2019 Favorable supply environment with increased availability of complex end-of-life materials Growing proportion of more complex and higher metal loaded spent automotive catalysts Higher availability of printed circuit boards due to Green Fence in China Umicore 2019 performance 13
Recycling 2019 performance Revenues +9%; REBIT +40% reflecting favorable supply mix, higher metal prices and optimization of input mix REVENUES 1.000 Precious Metals Recycling 800 663 650 641 681 626 600 Higher availability of spent autocats and printed circuit 320 368 311 318 300 boards 400 Higher metal prices 200 343 339 323 326 313 H1 0 Optimization of input mix allowed to offset most of the 2015 2016 2017 2018 2019 volume shortfall due to extended maintenance H2 REBIT shutdown and fire incident in July 27,6% 300 Stable revenues for Jewelry & Industrial Metals ; 250 21,3% 21,5% 19,7% 19,5% substantial earnings contribution from Precious 188 200 142 Metals Management 150 135 125 128 112 65 56 100 55 63 50 77 79 76 73 62 0 2015 2016 2017 2018 2019 million € Umicore 2019 performance 14
Recycling – major milestones in 2019 Investments to sustain Completion of multi- Upgrade of key and improve the year expansion equipment during environmental program at Hoboken extended shutdown performance of the plant plant Umicore 2019 performance 15
2019 financial review
Key figures 2019 REBIT REVENUES Free Operating Cash Flow € 509 m, close to 2018 € -39 m (€ -406 m in FY 18) +3% to € 3.4 bn record level Net debt € 1,443 m Strong growth in Catalysis (+7%) and Recycling (+9%) partly offset N et debt / REBITDA 1.9x Balanced contribution from the by decline in E&ST (-5%) three business groups Absorbs strong increase in D&A REBITDA RECURRING NET € 553 m CAPEX +5 % to € 753* m PROFIT (Group share) -5% to € 312 m ROCE 12.6% Stable group REBITDA margin of 22.1%* reflecting intense growth investments Recurring EPS of € 1.30 Margin increase in Catalysis and Proposed gross annual dividend Recycling of € 0.75 Strong performance in a persistently difficult market context Umicore 2019 performance 17 17 * € 17 m impact from IFRS 16, excluding this , REBITDA is € 736 m and REBITDA margin is 21.6%
Robust performance in challenging market context REBIT & REBIT margin Recurring EBIT at € 509 m, close to record level of 2018 700 15,5% 14,8% CAGR 600 13,2% 12,6% Double digit growth in Recycling and 12,2% 514 2015-2019 509 500 Catalysis offset by decrease in E&ST 398 + 11 % 320 400 299 252 269 300 Increase in D&A and costs related to 203 165 140 200 greenfield investments in battery 261 240 100 195 160 155 materials 0 2015 2016 2017 2018 2019 REBITDA & REBITDA margin 21,9% 22,1% CAGR Recurring EBITDA growth (+ 5%) to 20,0% 19,9% 19,3% 2015-2019 800 new high of € 753 m 753 720 + 10 % 587 496 600 465 396 356 Robust group margin despite headwinds 299 400 258 225 Adoption of IFRS 16 lease standard 200 364 357 effect of € 17 m 288 240 238 0 2015 2016 2017 2018 2019 Umicore 2019 performance 18 Group, excluding discontinued activities, million €
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